"Sources with first-hand experience of Microsoft's next generation console have told us that although the next Xbox will be absolutely committed to online functionality, games will still be made available to purchase in physical form. Next Xbox games will be manufactured on 50GB-capacity Blu-ray discs, Microsoft having conceded defeat to Sony following its ill-fated backing of the HD-DVD format. It is believed that games purchased on disc will ship with activation codes, and will have no value beyond the initial user." Crap like this should be illegal. If I can't buy second-hand games at my local favourite game store, Microsoft can shove this new Xbox where the sun don't shine. Which it obviously doesn't do in Redmond if they can come up with this kind of user-hostile bullshit. You can pretty much guarantee that they have made a silent agreement with Sony to implement similar anti-user feature on the next Playstation.

Games are expensive because they have to be printed on media, packaged and distributed. Add to that the fact that retailers will take a cut.

That isn't true at all. Games are expensive because of development costs, production and distribution are a minor factor. Retailers add to developer profits by advertising and distributing games. They're partners, not the enemy.

Nowadays, digital publishing allows for much cheaper distribution and Steam has shown that this is a success. It would completely make sense that digital versions of games cost significantly less.

Steam has shown what I predicted would happen which is that they still sell digital games like Black Ops 2 for $60 and keep the difference. We're heading towards a future where Steam, Microsoft and Sony will have no reason to discount games. Black Ops 5 will be $75 everywhere and not transferable or worth any material value after purchase. They won't care and will laugh in your face when you ask where the retailer's cut went.

Oh and thanks a lot Steam fans for cheering on a business model that results in a market with less pricing pressure. Thanks a lot.

Oh and thanks a lot Steam fans for cheering on a business model that results in a market with less pricing pressure. Thanks a lot.

Why would a business model like Steam result in a market with less pricing pressure?

I don't like the DRM on Steam, but it's not really bothering me, because Steam just works and I think it's really easy and handy.

Aside from that, they have regular sales on games, and if you can live with waiting a bit before getting the newest games, you can get big discounts on games. The standard price on Steam is similar as the price in regular shops. However, I think that probably 90% of my Steam games was bought at 75% or 50% off. For sure a better deal than in regular shops. In the end I might have spent the same amount of money, as I would spend in a regular shop, but I end up with more games.

Another thing that I like about Steam, is that they make indie games more accessible. In my experience, it's easier to find out about indie games, and it's easier to buy them.

Why would a business model like Steam result in a market with less pricing pressure?

Because there is only one distributor. If you don't like the price then you can't go down the street and buy one cheaper.

Used games act as pricing pressure by allowing customers to go elsewhere.

I don't like the DRM on Steam, but it's not really bothering me

Well it should bother you because it doesn't work which means you are accepting limitations for .... ???

Steam's DRM is a joke, have a look at piratebay if you don't believe me.

Aside from that, they have regular sales on games

Yes they have sales on games but I already pointed out that they will sell games like Black Ops 2 at full retail price (without the disc or used sale rights) if they can get away with it. They also currently are under pricing pressure from consoles and do not exist in a completely locked market. If Sony and Microsoft go the same route then it's just a few steps away from these 3 companies having zero reason to lower prices. It will be just like with cable companies in locked markets that decide "going rates" of entertainment and there won't be a goddamn thing you can do about it except for turning it off.